Warm weather means stock-market investors shouldn't look for a cooler February jobs report: economist

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There's a quantifiable connection between warm weather and U.S. jobs growth, says Exante Data's Jens Nordvig.

Don’t expect a red-hot January jobs report to be followed by a February chill when an even more eagerly awaited than usual monthly employment report is released at the end of next week.

That’s because warmer-than-usual weather likely contributed to January’s blowout jobs reading — a phenomenon that history shows tends not to get reversed the next month, said economist Jens Nordvig, founder and chief executive of research firm Exante Data. As the chart shows, January 2023 was 5.4 degrees warmer than normal, while payrolls saw a 517,000 rise, obliterating forecasts for a much smaller increase.

So what about February? The chart shows temperatures remained warmer-than-usual, to the tune of 3.4 degrees, but not as warm relative to the average as in January. That means the weather in February is unlikely to have the same impact on the February jobs report, set for release on March 10, that warm January weather had on that month’s data, Nordvig said.

Economists surveyed by The Wall Street Journal, on average, expect February payrolls to have grown by 225,000.

 

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